Tell me bout capitol gains taxes

[shelbylovesmelby]

Here's the situation. We have been approached by a land developer to buy our home from what the rumor mill has said we can expect 100-150k more than our home is worth. Now we'd like to buy another home a bit less than our offer maybe & use the differance to pay off some debt.

Now I know we'd probably have to pay income taxes on that excess money that we didn't roll into the new house. But would we have to pay Capitol Gains tax on top of that??? or ???? I was reading somewhere that they forgive that tax if it's under a certain amount?

thanks

[RetireEarly]

Good news, you can gain up to $250k if you're single and $500k if you're married without any capital gains taxes, regardless of whether or not you buy a new home and roll any of the money into that. But it must be your primary residence (lived in it for 2 of the last 5 years). Sounds like you're referring to the pre-1997 laws...

[jeffrey]

Here is the link the RetireEarly was talking about:

Capital gains and real estate sale: Tax rules give break to home sellers (Page 1 of 4)

[RetireEarly]

Also, you pay capital gains tax instead of ordinary income tax, not in addition to.

Edit: Thank you for posting the link Jeffrey